In essence, incorporation involves the transfer of the assets that you own as a principal into the ownership of an entirely separate legal being; namely the limited company.
The most important asset is likely to be goodwill. It is important that your goodwill is valued by a suitable expert to avoid the risk of challenge by HMRC.
Next up for consideration will be the Practice premises. Are these to remain with you or to be transferred into the limited company? The consent of a landlord and/or mortgagor may be required. If the property is freehold and is to be retained by the dentist it is common for the dentist to lease the premises to the limited company.
If you have the benefit of an NHS Contract, the consent of NHS England will be required to ensure the limited company becomes the owner of that contract moving forward. NHS England may well want to include provisions in the contract with the limited company to prevent it being transferred freely in the future. Such provisions need to be studied with care. Beware of NHS England taking the opportunity to review key financial terms of this contract.
If you are an NHS Practice you may need advice from a specialist regarding superannuation.
Other important contracts enjoyed by you may also need the consent of the other party before being transferred to the limited company and you should not assume they can be transferred automatically. Your contracts with your self-employed associates may well fall within this category. Also please do not assume that the banking facilities and rates that you enjoyed as an individual will be retained upon incorporation. It is recommended you speak to your funders well in advance of a proposed incorporation to see what facilities will be available to the limited company.
There's much to think about, but you can turn to us at Burn & Co for help.
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